Warning: Contracts Don’t Always End

Many contracts for services have small print clauses that says if you do not cancel the contract 30-days before its ending date it will automatically continue and you will continue to pay at your current rate. Also they will say they that the cancellation must be in writing and sent 30-days before the contract ends.

I have recently had complaints about this type of contract with alarm service companies. One man said I signed for one-year of alarm monitoring service and thought after one year the contract was over. But because of the clause at the end on the contract he was billed for 6 months of service before he could get the contract canceled.

Another woman is fighting the Alarm One Company over this same type of contract. She says she was told to write them a cancellation letter and she did but the company claims they did not get it, and continues to bill her for monthly service. She mailed her payment to Alarm One and they got that letter and on the same date she mailed her cancellation letter and they didn’t get that letter. Alarm One told her she is now obligated for a full year contract since she missed the date for the written cancellation. Plus she says Alarm One said in her contract was that the price would never increase from $29.99 per month to $31.84 per month. This would be a violation of her contract by the company.

When you send a letter of cancellation always send it “request return” that means the company has to sign that little green card and it will come back to you by mail.
The best thing to do is never signed a contract that has an automatic extension. If it is in the contract just scratch it out. If they give you a problem about signing a contract with no automatic extension, tell them you will get another alarm company, they will normally come around, because they do not want to lose a sale on a one year contract.

Filed August 2003